The Central Bank of Nigeria has raised an alarm over the increasing number of mutilated banknotes deposited with the apex bank by Deposit Money Banks.
As a result, the CBN has warned banks to stop including composed currency notes in their deposits or risk paying a penalty of four times the value of the banknote.
Composed banknotes are mutilated currency notes that comprise several parts of different banknotes of the same denomination.
The CBN gave the warning in a circular titled, ‘Treatment of Composed Banknotes’, issued to all deposit money banks on March 31, and signed by its Director, Currency Operations Department, Ahmed Umar.
Umar said that the existence of such banknotes in the economy falsifies the true value of the currency in circulation and could also be an avenue for fraudulent activities.
He added that the directive took effect from April 1.
“The management of the CBN observed with concern the increasing number of composed banknotes deposited by DMBs and request for replacement of such banknotes by members of the public.
“The existence of composed banknotes in the economy falsifies the true value of the currency in circulation, and can also be an avenue for fraudulent activities.
“Consequently, any composed banknote discovered in the deposit of DMBs shall attract a penalty of 400 per cent of the value.
‘’This circular takes effect from 1st April 2022,’’ it read in part.
